What is the estimated annual cost of workers' compensation insurance for payroll of $84,000 at a rate of 0.6%?

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Multiple Choice

What is the estimated annual cost of workers' compensation insurance for payroll of $84,000 at a rate of 0.6%?

Explanation:
The main idea is to apply a payroll-based rate to calculate the insurance cost. Convert the rate to decimal: 0.6% equals 0.006. Multiply by the payroll: 84,000 × 0.006 = 504. So the estimated annual cost is $504. This makes sense because 0.6% of 84,000 falls between $420 (0.5%) and $840 (1%), and specifically equals $504.

The main idea is to apply a payroll-based rate to calculate the insurance cost. Convert the rate to decimal: 0.6% equals 0.006. Multiply by the payroll: 84,000 × 0.006 = 504. So the estimated annual cost is $504. This makes sense because 0.6% of 84,000 falls between $420 (0.5%) and $840 (1%), and specifically equals $504.

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